FibroGen (FGEN) reported a second failure for its lead asset on Monday, and FGEN stock crashed to its lowest-ever point.

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The drug, dubbed pamrevlumab, didn’t meet the preset bar for treating idiopathic pulmonary fibrosis. Investors zeroed in on pamrevlumab’s impact on this lung disease after the drug also failed to make a difference in Duchenne muscular dystrophy earlier this month.

Based on the results, FibroGen will scrap two final-phase studies of pamrevlumab in idiopathic pulmonary fibrosis. Further, the company will work to extend its cash runway in 2026 through a cost-cutting plan.

William Blair analyst Andy Hsieh saw a favorable risk/reward for FibroGen given the significant market opportunity in idiopathic pulmonary fibrosis.

“Unfortunately, today’s results are clearly negative, removing our bull thesis for the company and raising questions on its future direction,” Hsieh said in a note to clients. “We believe the stock will likely trade below cash given the lack of visibility on cash flow extension strategies and the early-stage nature of pipeline assets.”

In morning trades on the stock market today, FGEN stock collapsed 80.9% to near 3.10. On June 7, shares fell more than 8% after pamrevlumab failed in Duchenne muscular dystrophy, a muscle-wasting disease.

FGEN Stock: Decline In Key Metric

Researchers tested patients’ ability to forcefully exhale — a measure called forced vital capacity — after 48 weeks of treatment. But recipients of pamrevlumab didn’t show any improvement. Rather, they also showed a decline in forced vital capacity, though less so than placebo recipients.

On average, patients who received pamrevlumab had a 260-milliliter decline in forced vital capacity vs. a 330-milliliter decline for placebo recipients. Pamrevlumab also didn’t lead to a slower decline in disease progression.

William Blair’s Hsieh downgraded FGEN stock to a market perform rating. He noted FibroGen is also working on a treatment for pancreatic cancer and another treatment for Duchenne muscular dystrophy. But investors have low expectations on both.

The fall of FibroGen stock marked a record low in massive volume.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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